The Asia-Pacific (APAC) region stands at the brink of transformational changes in energy procurement, particularly when it focuses on enabling 24/7 carbon-free electricity (CFE). A recent report from BloombergNEF (BNEF), created alongside the Global Renewables Alliance, outlines how achieving this ambitious goal can pave the way for significant private investments, aid corporate sustainability aims, and help the region meet its climate commitments.
According to the BNEF report titled '24/7 Carbon-Free Energy Procurement in APAC: Pathways for Companies and Countries', the urgency of action cannot be understated. APAC has seen its share of global emissions skyrocket, climbing from 25% in 1990 to a staggering 47% by 2021, predominantly due to emissions from its power sector. This stark reality emphasizes the pressing need for investment across renewable energy sectors like solar and wind as well as energy storage, which must be accompanied by upgrades to grid infrastructure.
Under the Net Zero Scenario laid out by BNEF’s New Energy Outlook, renewables could account for nearly 75% of the required emissions reductions leading up to 2050. Considering the fall of renewable energy costs, the transition appears not only necessary for environmental health but also economically feasible to fulfill the Paris Agreement's ambitious climate objectives.
Currently, many companies across APAC source their clean energy by matching their annual consumption with renewable energy purchases, but this method often fails due to gaps when local grids supply energy during certain hours that's not emission-free. A shift to CFE would involve aligning energy source procurement with real-time consumption, creating a more effective way for corporations to operate sustainably.
The report emphasizes the complex regulatory barriers and market limitations restricting access to affordable renewable energy—barriers which have been stubbornly persistent and hinder not only the procurement of clean energy but also the overall growth of green technology deployment. Addressing these obstacles is imperative for corporate entities to successfully reduce their carbon footprints.
Ali Izadi, BNEF’s Head of Asia Pacific, noted, "Demand for clean power procurement in APAC already far outstrips available supply. APAC regulators need to tackle regulatory issues head-on to boost clean electricity supply and empower companies to procure 24/7 CFE options. This would lead to more efficient coordination among corporate power users, renewable independent power producers, grid operators, and regulators, decreasing the overall costs of decarbonization."
Adding to this perspective, Julia Souder, CEO of the Long Duration Energy Storage (LDES) Council, underscored the role new storage technologies could play: "24/7 carbon-free energy procurement equips leaders with substantial leverage to inspire the energy transition not only within APAC, but on a global scale. Long-duration storage technologies are particularly effective as they allow for the storage of renewable energy to be used over days, weeks, and even seasons, thereby ensuring consistent sustainability."
For APAC to transition effectively to 24/7 carbon-free electricity, BNEF’s report suggests six key recommendations aimed at policymakers. These include enhancing data transparency and access, reforming operational structures within the grid, and introducing innovative auction designs similar to those currently seen operating successfully across parts of India. By adopting these changes, governments could expedite renewable technology deployment and attract the necessary investments, which are pivotal to decarbonizing regional power systems.
Trigya Singh, Senior Coordinator for Corporate Sourcing at the Global Renewables Alliance, voices the need for modernized regulations, stating, "We need to overhaul outdated regulatory frameworks, standardize policies for new technologies, and create granular attribute certificates. The focus should shift toward flexibility since the existing power purchase agreements, green electricity tariffs, and tariff frameworks are not adequately geared toward it, which is necessary for successfully integrating variable renewable resources."
The comprehensive examination conducted by BNEF on decarbonization strategies across 11 key APAC markets—which includes countries such as Bangladesh, India, Japan, and Vietnam—brings to light how the implementation of 24/7 CFE procurement can bolster each nation's specific decarbonization objectives.
To sum it up, the shift toward 24/7 carbon-free electricity procurement isn't just about keeping pace with global climate targets; it’s about creating the investment environment required to scale clean energy initiatives and drive the decarbonization of APAC's energy sector. With corporate energy buyers committed to achieving more sustainable practices, it’s imperative for policymakers to act expeditiously to establishing the necessary foundation for the rapid growth of clean energy solutions throughout the region.
